Ad Fraud Is Eating Up Brand Revenue
Fake traffic and ad fraud significantly undermine campaign ROI by simulating real traffic. Research shows that ad fraud is costing 3-10% of revenue to 40% of businesses.
Brands are increasing their budgets for ad campaigns but seeing substandard results in terms of ROI and acquisition of new customers. With large chunks of budgets going to ads, marketers must be wary of ad fraud.
Fake traffic and ad fraud significantly undermine campaign ROI by simulating real traffic. This is especially problematic as ecommerce businesses invest heavily in digital advertising, making their ads prime targets for fraudulent activities.
As digital marketing evolves with AI, it brings both solutions and challenges. Marketers must implement robust fraud prevention measures to protect their investments and ensure effective ROI. A recent research undertaken by Tapper found that bots click on branded search terms 72% of the time, costing companies at least $1 per click.
Further, once bots reach the landing page, 96% of them stay static for 7 seconds before leaving. This not only drains ad budgets but also skews important metrics.
The report ‘Ad Fraud in Ecommerce: The Impact of Bot Traffic on Your Business’ by Tapper, a provider of enterprise grade security, reveals the first analysis of bot behavior clicking on ecommerce ads in the MENA region. Based on data from 20 leading ecommerce sites, it reveals the short and long-term implications of ad click bots on ecommerce metrics and growth prospects.
Key Findings:
- 16% of all ecommerce ad clicks are invalid: A significant portion of advertising budgets is wasted on invalid clicks, with bots often mimicking human behavior.
- 40% of businesses lose 3-10% of revenue due to ad fraud: This highlights the need for more effective fraud prevention measures.
- Bots lead to $71 billion in losses expected in 2024: The financial impact of ad fraud on ecommerce is staggering and continues to grow.
- One in 40 bots reaches checkout pages: Bots not only distort metrics but also create logistical challenges, such as false orders and chargeback fraud.
Discussing the report, Nasser Oudjidane, Cofounder at Tapper, stated, “As ecommerce platforms face increasing challenges from sophisticated bot traffic, understanding the nuances of ad fraud is crucial for sustainable growth. While the digital landscape is rapidly expanding, the threats posed by fraudulent activities are evolving just as quickly. The report insights highlight the importance of integrating advanced technologies and strategic approaches to effectively mitigate these risks.”
In this challenging economy, brands must not assume that all traffic from pay-per-click (PPC) campaigns or new AI-driven ads are from real leads. Companies must consider implementing ad fraud solutions before launching expensive ad campaigns that pose risk of fraudulent interest.
